In an Aggregate Expenditures Diagram,a Lump-Sum Tax (T)will

question 80

Multiple Choice

In an aggregate expenditures diagram,a lump-sum tax (T) will:

• A) not affect the C + I_g + X_n line.
• B) shift the C + I_g + X_n line upward by an amount equal to T.
• C) shift the C + I_g + X_n line downward by an amount equal to T.
• D) shift the C + I_g + X_n line downward by an amount equal to T × MPC.

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Definitions:

Improvidence

Lack of foresight or care in managing finances, often leading to unnecessary expenditure or loss.

Capacity

The legal ability of a party to enter into a contract.

Severely Intoxicated

A state of being under the influence of alcohol or drugs to a significant degree, impacting cognitive and physical abilities.

Capacity

In law, the ability of an individual to enter into a contract, evidenced by their being of sound mind and of legal age, or by a business to enter into agreements.